A plausible narrative has emerged from the broader tech sector in response to the Covid-19 outbreak, namely that while the full commercial implications arising from the virus are difficult to gauge, it has precipitated an upsurge in the number of inquiries from companies looking at continuity plans and remote-working solutions.
The scenario is repeated within Computacenter's full-year release, much of which was flagged in a January update. So, although the group has witnessed a step-up in demand for laptop computers, management remains concerned that “customers may postpone significant IT infrastructure projects while the current uncertainty remains”. There is also the potential disruption to supply chains to take on board.
The shares were marked down heavily on results day, although doubtless part of the wider sell-off. Management will slightly aggrieved given that sales have smashed through the £5bn barrier, driven by a 20 per cent sales hike from the technology sourcing segment, which accounts for three-quarters of the top-line. Adjusted profits increased by 24 per cent to £146m, helped along by growing trading volumes in both France and Germany, the latter all the more noteworthy given the “material spend reduction from a key customer”. Trading on home turf was tougher as the UK operation was weighed down by lower revenues in services and technology. “We’ve had a lack of new wins in the UK,” said chief executive Mike Norris, conceding that growth was lagging behind its businesses in other countries.
Investec forecasts adjusted pre-tax profits of £147.2m and EPS of 92.8p in 2020, compared with £146.2m and 92.5p in 2019.
| COMPUTACENTER (CCC) | ||||
| ORD PRICE: | 1,310p | MARKET VALUE: | £ 1.50bn | |
| TOUCH: | 1,307-1,310p | 12-MONTH HIGH: | 1,950p | LOW: 1,037p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 432p* | NET CASH: | £20.4m † | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 3.06 | 127 | 83.9 | 21.4** |
| 2016 | 3.25 | 87.1 | 52.9 | 22.2 |
| 2017 | 3.79 | 112 | 67.3 | 26.1 |
| 2018 | 4.35 | 108 | 71.4 | 30.3 |
| 2019 | 5.05 | 141 | 90.3 | 37.0 |
| % change | +16 | +31 | +26 | +22 |
| Ex-div: | 28 May | |||
| Payment: | 26 Jun | |||
| *Includes intangible assets of £176m, or 154p a share. **Excludes special dividend of 71.9p a share. †Netted against £117m in lease liabilities. | ||||
